HR/Manpower Demand

Issues to be covered
• Different types of Qualitative and Quantitative
Manpower forecasting techniques
Different qualitative and quantitative techniques for
ascertaining HR/manpower demand

• Trend Analysis
• Expert Forecasts
• Delphi Technique
• Nominal Group Technique
• HR Budgets: Manning or Staffing Table
• Envelope/Scenario Forecasting
• Regression Analysis
 Index/Trend Analysis
• Trend analysis is the historical relationship
between an operational index and the number of
employees required by the organization
• Five steps to do trend analysis:
– Select the appropriate business/operational index
– Track the business index over time
– Track the workforce size over time
– Calculate the average ratio of the business index to
the workforce size
– Calculate the forecasted demand for labor
 Expert Forecasts
• Direct managerial input is used to determine workforce
requirement
• Using experts to arrive at a numerical estimate of future
labor demand is considered to be a qualitative process
for determining future labor requirements because it is a
detailed process of stating assumptions, considering
potential organization and environmental changes, and
deriving a rationale to support the numerical estimate.
• Experts include line managers, HR and business planning
staff, business consultants, financial analysts, university
researchers, union staff, industry spokesperson.
• Govt. officials and experts may also be included
depending on the case of forecasting.
• Obtaining the labor demand estimates a
number of options are available-
– Interviews
– Questionnaires (conducted in person or by mail or
email)
– Telephone conference calls
 Delphi Technique
• A carefully designed program of sequential
individual interrogations(usually conducted
through questionnaires) interspersed with
information feedback on the opinions expressed
by the other participants in previous rounds.
• The key feature of this technique is that once a
group of experts is selected, the experts do not
meet face to face. Instead, a project coordinator
canvasses them individually for their input and
forecasts by means of a progressively more
focused series of questionnaires.
 Six steps in Delphi technique
1. Define and refine the issue or question.
2. Identify the experts, terms, and time horizon.
3. Orient the experts.
4. Issue the first round questionnaire.
5. Issue the first-round questionnaire summary
and the second round of questionnaires.
6. Continue issuing questionnaires
 Advantages of Delphi Technique

• It eliminates the problems associated with

meeting face to face by groups and reluctance
of individual experts to participate due to-
– Shyness
– Perceived lower status or authority
– Perceived communication deficiencies
– Issues of individual dominance and groupthink
• Effective utilization of experts drawn from
widely dispersed geographical areas.
 Disadvantages of Delphi Technique

• Due to series of questionnaires to be

administered time and cost associated with it can
be higher than other techniques.
• Since result cannot be validated statistically it is
largely dependant on individual knowledge and
commitment of each of the contributing expert.
• If experts drawn from the same field their
professional training may guide them in the same
line of thinking.
• Individual experts may lack sufficient expertise or
information to contribute meaningfully.
 Nominal group Technique
• Nominal group is a long run, qualitative demand forecasting
technique utilizing expert assessments.
• It differs from delphi technique in several ways-
– The group does, in fact, meet face to face and interact but only after
individual written, preparatory work has been done and all the demand
estimates have been publicly tabled or written without discussion
– The demand estimate is considered to be the property of the entire
group and considered to be impersonal in nature which minimizes the
potential for dominance, personal attacks, and defensive behavior in
support of the estimates presented in the group forum
– Finally the expert forecast is determined by a secret vote of all group
members on their choice of the tabled demand forecasts.
– The estimate receiving the highest rating or ranking during the voting
process is deemed to be the group’s forecast.
 Seven Steps nominal group technique

• Define and refine the issue or the question and

the relevant time horizon.
• Select the experts.
• Issue the HR demand statement to the experts.
• Apply expert knowledge, state assumptions, and
prepare an estimate.
• Meet face to face
• Discuss the demand estimates and assumptions
• Vote secretly to determine the expert demand
assessment.
 HR Budgets: Staffing or Manning
Table
• HR budgets are quantitative, operational, or short
run demand estimates that contain the number
and types of personnel required by the
organization as a whole and for each sub unit,
division, or department.
• HR budgets are prepared by the HR staff in
conjunction with line managers and take into
consideration information from historical
company staffing trends, competitor staffing
practices, industry and professional associations.
 Envelope/Scenario Forecasting
• Envelope/scenario forecasts projections or
multiple predictor estimates of future demand
for personnel predicated on a variety of
different assumptions about how future
organizational events will unfold.
 Regression Analysis
• Regression analysis presupposes that a linear
relationship exists between one or more
independent (causal) variables, which are
predicted to affect the dependent (target)
variable- in our instance, future HR demand
for personnel
 Simple regression prediction model
Y= A+ BX
Y= the dependent variable (hr demand/number of
personnel required)
A= Constant (intercept)
B= The slope of the linear relationship between X and Y
X= the independent /causal variable (level of sales,
production output)
As Planning Manager of Keele Kontainers Ltd., a dynamic fast growing
company located in Wawanesa, Manitoba, you have an important task to
fulfil. To continue the company’s history of successful growth, you need to
forecast the number of marketing personnel required for $8million and
$10 million of sales activity. You have the following historical information
available to guide your regression analysis and HR demand forecasting:

X (Sales level $ Millions) Y (Number of Marketing

Personnel)
2.0 20
3.5 32
4.5 42
6.0 55
7.0 66
• Calculate the number of operations personnel
required when production will be 250 and 290
tons
X (Production volume in Tons) Y (Number of Operations
Personnel)
150 140
170 155
180 167
200 185
220 202